Australian Federal Government supports massive conventional natural gas and Coal Seam Gas (CSG) developments and has introduced a Carbon Tax to penalize fugitive emissions (gas leakage). However the endlessly dishonest Labor Government understates gas leakage as 0.12% (rather than the science-based estimates of 3-.3%-7.9% of gas produced) and under-estimates the Global Warming Potential (GWP) of methane (CH4, the bulk of natural gas) as 21 times that of carbon dioxide (CO2) (whereas it is actually 105 times worse than CO2 as a greenhouse gas (GHG) on a 20 year time frame and considering aerosol impacts).

This leads to an immense Carbon Tax Scandal in which a pro-gas Labor Government understates the Carbon Tax obligations of the corporate gas producers by a factor of 137-329, collecting a mere $21 million annually rather than the science-indicated Carbon Tax obligation of about $3-7 billion each year from leakage of natural gas (fugitive emissions) .

Australian Federal politics are dominated by the neoliberal Liberal Party-National Party Coalition Opposition and the neoliberal Australian Labor Party Minority Government (aka the Lib-Labs, or the Liberal-Laborals). The Coalition currently has about 45% of the vote, Labor 35% and the ethical, progressive, pro-Humanity and pro-environment Greens have about 10% of the vote. However much of what passes for political debate in look-the-other-way, Elephant-in-the-Room-ignoring Australia has concentrated on personal abuse over alleged “sexism” and “misogyny”, alleged sexual scandals, and alleged Labor MP involvements with persons involved in misappropriation of hundreds of thousands of dollars of union funds (specifically, from the Health Services Union (HSU) and the Australian Workers Union (AWU)). The previous largest financial scandal under Labor was the recent cessation of legal action against Australia’s biggest corporate criminal, a major donor to the Labor Party and to Apartheid Israel, who had been connected with a circa $132 million premium-stripping insurance company fraud and whose company had been fined $36 million for lying to the Australian Competition and Consumer Commission (ACCC) over a massive price-fixing fraud. However these scandals are dwarfed by the Carbon Tax Scandal involving Labor Government under-statement of Corporate Carbon Tax obligations of about $3-7 billion annually and of about $100 billion over the coming decade.

Infamous Nazi leader Adolph Hitler famously coined the term ”the Big Lie” in his book “Mein Kampf’ (“My Struggle”), stating “[The masses] more readily fall victims to the big lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods. It would never come into their heads to fabricate colossal untruths, and they would not believe that others could have the impudence to distort the truth so infamously”. Hitler’s infamous Reich Minister of Propaganda in Nazi Germany from 1933 to 1945, Joseph Goebbels, stated in similar vein: “The essential English leadership secret does not depend on particular intelligence. Rather, it depends on a remarkably stupid thick-headedness. The English follow the principle that when one lies, one should lie big, and stick to it. They keep up their lies, even at the risk of looking ridiculous.” This present Labor Government Carbon Tax Scandal potentially involving loss of $100 billion in revenue is one million (1,000,000) times greater than the theft of $100,000 from union funds and one thousand (1,000) times greater than circa $100 million involved in premium-stripping an insurance company or in massive price fixing crimes.

The Carbon Tax as advocated by top US climate scientist Dr James Hansen (head of NASA’s prestigious Goddard Institute for Space Studies, GISS; adjunct professor at 82-Nobel-Laureate Columbia University; and author of “Storms of My Grandchildren”) involves a taxation of fossil fuel producers at the mine gate with all proceeds going directly to citizens: “Science reveals that climate is close to tipping points. It is a dead certainty that continued high emissions will create a chaotic dynamic situation for young people, with deteriorating climate conditions out of their control. Science also reveals what is needed to stabilize atmospheric composition and climate. Geophysical data on the carbon amounts in oil, gas and coal show that the problem is solvable, if we phase out global coal emissions within 20 years and prohibit emissions from unconventional fossil fuels such as tar sands and oil shale… Fossil fuels are cheapest because they are not made to pay for their effects on human health, the environment and future climate. Governments must place a uniform rising price on carbon, collected at the fossil fuel source – the mine or port of entry. The fee should be given to the public in to, as a uniform dividend, payroll tax deduction or both. Such a tax is progressive – the dividend exceeds added energy costs for 60% of the public. Fee and dividend stimulates the economy, providing the public with the means to adjust lifestyles and energy infrastructure… As the carbon price rises, most coal, tar sands and oil shale will be left in the ground. The marketplace will determine the roles of energy efficiency, renewable energy and nuclear power in our clean energy future… Cap and trade with offsets [ETS], in contrast, is astoundingly ineffective. Global emissions rose rapidly in response to Kyoto, as expected, because fossil fuels remained the cheapest energy. Cap and trade is an inefficient compromise, paying off numerous special interests. It must be replaced with an honest approach, raising the price of carbon emissions and leaving the dirtiest fossil fuels in the ground.” [1].

Unfortunately the Australian Labor Government has introduced a Carbon Tax-Emissions Trading Scheme (ETS) that commenced in 2012 and involves an initial Carbon Tax applied to consumers rather than producers of fossil fuels, with 90% of the circa $10 billion per annum “take” being returned to domestic and industrial consumers as compensation or tax breaks with a notional $1 billion per annum left over, being retained for investment into what the Government calls “renewable energy” or renewable energy-ameliorated dirty energy. In 2015 the scheme transmutes to an utterly counterproductive ETS that is disastrous because the ETS approach (a) is empirically unsuccessful, (b) is accordingly a counterproductive diversion, and (c) involves the utterly fraudulent selling of licenses to pollute the one common atmosphere of all countries in the world, including seriously climate change-threatened countries such as Bangladesh, India, Pakistan, China, South East Asian countries, Caribbean, Indian Ocean and Pacific Island States and even the mighty United States of America [2].

A recent analysis published in The Land stated that “The federal government calculates carbon tax liability for conventional and unconventional gas alike, using estimates that just 0.12 per cent of the produced gas escapes to the atmosphere. But recent studies of unconventional gasfields in the US and Australia suggest emissions could be 4 per cent or higher. The US Environmental Protection Agency has doubled its own estimate of fugitive emissions to 2.4 per cent and Australia's Department of Climate Change is reviewing its methodology for calculating greenhouse gas emissions from coal seam gas operations, for potential use in the 2013 National Greenhouse Accounts” [3].

The international mining corporation giant Rio Tinto was strongly opposed to the Australian Government’s Carbon Tax and has provided the following summary: “From 1 July 2012 the Australian Government proposes to establish a tax on emissions of the following greenhouse gases [GHGs] – carbon dioxide [CO2], methane [CH4], nitrous oxide [N2O], and per fluorocarbons from aluminum smelting. The tax will be levied per ton of carbon dioxide equivalent (CO2e) [CO2-e] emissions. The carbon dioxide equivalent of any greenhouse gas is the amount of carbon dioxide [CO2] that would cause the same amount of global warming, for example, methane has a global warming effect 21 times stronger than carbon dioxide so one tone of methane is equivalent of 21 tons of carbon dioxide. Put more simply, 1 tone of methane equals 21t [21 tones] CO2. The carbon tax will be $23 per ton of CO2e [CO2-e, CO2-equivalent] in 2012. /2012, $24.15 in 2013/2014 and $25.40 in 2014/2015. From 1 July 2015, the government proposes to change the tax to an emissions trading scheme [ETS]. From that point forward, emission permits will be traded and the price will vary with supply and demand. After emission trading commences, the Australian Government has estimated that the price will be around $29 in 2015 and increase every year by 5 percent above inflation.” Assuming an Australian inflation rate of about 3% per annum, this means that the Carbon Tax will increase 8% per annum to roughly $31 per ton CO2-e in 2016, $34 in 2017, $37 in 2018, $39 in 2019 and $43 in 2020 {4].

The Australian Government assumes for Carbon Tax purposes that the Global Warming Potential (GWP) of CH4 is 21 times that of CO2 on a 100 time frame. However a NASA re-assessment has determined that the GWP for CH4 on a 20 year time frame and with aerosol impacts considered is 105, 5 times greater than the GWP for CH4 used by the Australian Government to assess the Carbon Tax on fugitive emissions [5]. .

The Australian Liberal-National Party Opposition and Labor Government have a common policy of a derisory 5% off 2000 Domestic greenhouse gas (GHG) pollution by 2020 coupled with unlimited coal, liquid natural gas (LNG) and iron exports. Using Australian Treasury modeling of Australia’s Domestic GHG pollution under the Carbon Tax-ETS [6], Australian Bureau of Agricultural and Resource Economics (ABARE) projections of Australian Exported GHG pollution (as coal, gas and iron ore exports) [7, 8], and US EIA data [9] (that estimates 2010 Australian LNG exports of 12.4 Mt LNG (= 12.4 x 44/15 = 34 Mt CO2-e on combustion to CO2 ) as compared to an Australian EnergyQuest report of 19.8 million tons (= 19.8 x 44/16 = 54 Mt CO2-e) [10], one can estimate the following picture of Australian Domestic and Exported GHG pollution (in units of millions of tones of CO2-e, Mt CO2-e) in the first 2 decades of the 21st century [11, 12]. While climate scientists demand an urgent cessation of fossil fuel burning, Australia’s Domestic plus Exported GHG pollution will more than double in the period 2000-2010. The data below are based on fossil fuel combustion and ignore fugitive emissions due leakage of gas (mainly methane, CH4) from coal mines and in coal-seam gas (CSG) production.

Australia applies the Carbon Tax not to fossil fuel production (as advocated by experts such as Dr James Hansen) but to fugitive emissions (CO2 and CH4 leakage) from such production. The Australian Government assesses such leakage as an extraordinarily low 0.12% of gas production whereas the US EPA estimates such leakage at 2.4% and average gas leakage in the US has been estimated to be 3.3% [13]. Professor Robert Howarth (Cornell University) estimates that gas leakage from fracking as up to 7.9% [14].

(2) Science-based Carbon Tax take (7.9% leakage, CH4 GWP 105 times CO2). Using a GWP of CH4 105 times that of CO2 and a 7.9% leakage, the Carbon Tax on 12.4 Mt LNG exports (2010) = (7.9/100) x 12.4 Mt LNG x (105 Mt CO2-e/Mt LNG) x $23/tone CO2-e = $2,366 million. If we also consider leakage from 24.0 Mt CH4 used Domestically (2010) , then the science-based Carbon Tax on Domestic leakage would be would be $4,579 million, this yielding a total Carbon tax liability of $4,579 + $2,366 million = $6,945 million annually, this being $6,945 million /$21.1 million = 329 times the present Carbon Tax take.

(3). Science-based Carbon Tax take (3.3% leakage, CH4 GWP 105 times CO2). If we assume a 3.3% systemic gas leakage (the US average) then the Carbon Tax liability on leakage from both Domestic and Exported gas would be $2,901 million, this being $2,901 million/$21.1 million = 137 times the present Carbon Tax take.

The astonishing thing is that a pro-gas Federal Labor Government obsessed with getting a budget surplus is letting the natural gas industry avoid paying over 99% of the Carbon Tax it should be paying. This budget-conscious, pro-gas Federal Labor Government - that has slashed $0.5 billion from the universities’ research funds and forced single parents (mostly single mothers) off the parenting payment and on to the dole in January next year - has foregone annual Carbon Tax receipts from gas leakage of about $3 billion to $7 billion.

This is an immense scandal – just imagine if the Federal Government through ignorance and lack of due diligence permitted highly profitable major corporations to declare essentially zero taxable income simply on their say-so.

Another key aspect of the Carbon Tax take was critically raised by the findings of 3.5-fold elevated atmospheric methane in a coal seam gas (CSG) area by 2 Australian scientists, Dr Isaac Santos and Dr Damien Maher from Southern Cross University's Centre for Coastal Biogeochemistry Research in the School of Environment, Science and Engineering. According to Dr Damien Maher: “Typically background concentrations of methane in the atmosphere are approximately 1.8 parts per million. In Tara [a coal seam gas area in Queensland] the concentrations are consistently higher than two parts per million and approach seven parts per million in a few locations. This is about three and a half times higher than expected if there was no change in the atmosphere. These results are higher than values reported for conventional gas production fields in Siberia, one of the world’s largest natural gas production areas.” According to Dr Isaac Santos “Despite commercial production starting in the mid-1990s, this is the first publicly available data on concentrations of methane in the atmosphere of Australian CSG production areas. We used cutting edge technology to make the measurements. Our work highlights the need for further research to adequately quantify the emissions and their source” [15].

These scientists have immediately come under attack from the coal-seam gas [CSG] industry body, the Australian Petroleum Production and Association [APPEA], which wrote to the vice-chancellor of Southern Cross University asserting that "Without evidence to the contrary, it appears that the research undertaken by Dr Santos and Dr Maher has not met the basic standards required of a genuinely scientifically rigorous approach”, to which Southern Cross University's vice-chancellor Peter Lee replied: "We reject your assertions and believe your media release is misleading to your members and to the general public". Non-scientist Federal Energy and Resources Minister Martin Ferguson incorrectly criticized the pre-publication release of the data by the scientists, stating that “[In] the scientific community that is not regarded favorably. Let's have a factual, scientific debate, not an emotional debate, because there is too much at risk and the community expects that approach to life. Conduct yourself in a professional way and focus on the outcome, not short-lived media opportunities” [16].

The environmental think-tank Beyond Zero Emissions has issued a Media Release stating “Coal-seam gas (CSG) developers have been massively understating their carbon tax liability, throwing the whole future of the industry into question, according to climate and renewable energy think-tank Beyond Zero Emissions (BZE). Researchers at Southern Cross University have recorded significant levels of methane at the Tara CSG gas fields, indicating the likelihood of high fugitive emissions associated with their operations. This finding follows similar information from the US Department of Energy coming from CSG fields in Wyoming, and other results from US unconventional gas fields. Unlike the United States, Australia has legislated liabilities for fugitive emissions, which are included in our carbon price. Currently, CSG developers are using an assumed fugitive emissions factor of 0.12%. This is based on a 1996 American Petroleum Institute document intended for health and safety, which explicitly states it should not be used as basis for emissions inventory accounting standards” [17].

Finally, in 2009 the WBGU (which advises the German Government on climate change) estimated that for a 75% chance of avoiding a disastrous 2 degree Centigrade temperature rise the world can emit no more than 600 billion tones of CO2 between 2010 and zero emissions in 2050. The “fair share” of Australia (population 23 million) of this terminal GHG pollution budget for the whole world (population 7 billion) is 600,000 million tones CO2 x 23 million/7,000 million = 1,971 million tones CO2-e, LESS than Australia’s 2010 Domestic plus Exported GHG pollution of 2,010 million tones CO2-e (assuming 7.9% leakage) and about the same as the value of 1,834 Mt CO2-e (assuming 3.3% leakage). Australia’s huge resources and the bipartisan Coalition and Labor policy of unlimited coal, gas and iron ore exports means that Australia is committed to exceeding the whole world’s terminal GHG pollution budget by a factor of THREE (3) [11].

Australians need some answers to many questions relating to this scandal, of which the following questions are particularly pertinent:

1. Why are the Southern Cross University Santos and Maher study the first such publicly available data on methane levels in coal seam gas (CSG) production areas?

2. Why haven’t the Federal and State Governments – and indeed the CSG companies - made publicly-available detailed atmospheric methane measurements over time in CSG production areas before and after commencement of CSG activities?

3. Why has the pro-gas Federal Labor Government permitted Carbon Tax revenue collection on natural gas fugitive emissions that is 137 to 329 times lower than that demanded by well-documented science i.e. less than one per cent (1%) of that required?

It must be re-iterated that this is an immense scandal – just imagine if the Federal Government through ignorance and lack of due diligence permitted highly profitable major corporations to declare essentially zero taxable income simply on their say-so.

Rational risk management that is crucial for societal safety successively involves (a) accurate data, (b) scientific analysis, and (c) systemic change to minimize risk, but this process is dangerously short-circuited by spin, censorship and dishonesty. Australian voters should not tolerate the extraordinary incompetence and dishonesty of a Labor Government that (a) claims to be “tackling climate change for a clean energy future” but is in actuality committed to massive long-term increases in greenhouse gas pollution and (b) forgoes over 99% of science-indicated Carbon Tax revenues from gas industry fugitive emissions.

Sensible, science-respecting Australian voters – especially Labor voters utterly betrayed by this neoliberal, pro-coal, pro-gas Labor Government - will simply vote 1 Green and put Labor last until it eschews deceit and reverts to decent values. The climate change-threatened world as a whole will not indefinitely permit Australia to so massively and disproportionately contribute to GHG pollution and will eventually respond by Boycotts, Divestment, Sanctions, Green tariffs, International Court of Justice litigations and International Criminal Court prosecutions.

References.

[1]. James Hansen, “It’s possible to avert the climate crisis”, Countercurrents, 29 November 2009 and James Hansen, “Copenhagen summit: is there any real chance of averting the climate crisis?” The Observer, 29 November 2009.